Question
Lilo and Stitch, Co. paid a dividend of $1 on $4 of earnings last year. Earnings and dividends are expected to grow at 30% over
Lilo and Stitch, Co. paid a dividend of $1 on $4 of earnings last year. Earnings and dividends are expected to grow at 30% over the next 2 years. It is expected to have a P/E ratio of 20 in two years as well. Using an appropriate discount rate of 10% and a 2-stage DDM, what is the intrinsic value of its stock?
| -$5.00 |
| $114.32 |
| $111.74 |
| $138.19 |
| None of the other answers is correct |
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Financial Markets and Institutions
Authors: Jeff Madura
11th Edition
1133947875, 9781305143005, 1305143000, 978-1133947875
